Yet another remarkable MENA-based M&A play involving a big player, a rising Tech startup, and a future-forward business plan. The region's pioneering Super App and Multi-Service provider Careem has officially acquired UAE-based Food Delivery Tech startup MUNCH:ON
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Careem, the region’s leading multi-service platform, announces its acquisition of MUNCH:ON in the UAE. Just a few weeks before the end of H1 2022, the UAE's subscription-based food delivery platform is set to rebuild its offering for the Careem App, adding them to the list of remarkable VC vertical integrations we’ve been recording since the beginning of the year.
Founded in 2016 by Mohammad Al Zaben, Dana Baki, and Awn Ali, MUNCH:ON is a subscription-based food delivery platform that connects customers to meals at a discount by tapping into underutilized kitchen capacity and using scheduling, bundling, and routing technologies. The solution drives massive efficiencies for restaurants and cloud kitchens and has built scale in the corporate lunch segment. The UAE-based Tech startup has aggregated more than $16M in funding over 4 rounds, which gained the backing of high-value investors the likes of Global Ventures, Shorooq Partners, Derayah, and Vision Ventures amongst a consortium of veteran backers.
The MENA region has observed a new record number of exits over FY 2021 kicking back from a more reserved M&A activity in 2020. By FY 2021, the number of MENA-based exists had observed a 119% YoY growth, with startups like Jordan-based Jawaker, Qatar-based Meddy, and UAE-based Mumzworld recording major exit plays. As we near the release of our EVM H1 2022 Venture Investment Reports in July, we’ve also been tracking vigorous M&A activity in the MENA market since the beginning of the year. Considering (much) more than 50% of last year’s record exits have already been announced over the first half of 2021, we’ve also been observing remarkable consolidation and vertical integration plays, on this major level, like KSA-based Foodics acquiring Jordan-based POSRocket, KSA-based Sary acquiring Egypt-based Mowarrid, and most recently Morocco-based Chari.ma acquiring Ivorian last-mile Tech startup Diago.
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In this new merger, MUNCH:ON will stop daily operations and the offering will be rebuilt on the Careem app. The Careem Food and MUNCH:ON teams will work together to deliver even greater value by introducing low-cost meal segments that MUNCH:ON has pioneered in the region as well as new food discovery and delivery options for corporates.
Since its inception, MUNCH:ON has delivered millions of meals to customers across 20 thousand companies. While global market uncertainties put pressure on expansion efforts, M&A plays like this are becoming more relevant and favorable for startups and VC investors across MENA and Emerging Venture Markets. This acquisition in particular will put on display a veteran startup, Careem being one of the first to succeed in scaling regionally and across EVMs, join powers with a rising Tech startup to create a value-based offering that should crack new market opportunities. Mudassir Sheikha, CEO and Co-founder of Careem, commented: “The MUNCH:ON team have built a competitive food offering driven by a clear vision to make food more accessible and affordable. The Food offer on the Careem app today serves millions of customers across the Middle East and is growing rapidly. By acquiring MUNCH:ON, Careem Food will be able to build an even more competitive offering with a much richer variety of benefits for both customers and restaurant partners.”
In the UAE, the Careem Super App offers more than a dozen services including ride-hailing, food and grocery delivery, micro-mobility, payments, and partner services. Most remarkably, Careem Food serves millions of customers with access to over 18,000 restaurants in 8 core cities across the UAE, Saudi Arabia, Jordan, and Qatar. This power partnership builds new horizons for both teams as Mohammad Al Zaben, CEO and Co-founder of MUNCH:ON, concluded, “At MUNCH:ON, we set out to build the most affordable food ordering experience in the world. We are thrilled to be a part of a broader mission at Careem to deliver undeniable value to customers, partners, and Captains.”
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